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Up, but down?

05 February 2004 Angelo Coppola

Sage Group plan to report an improvement of 30% in headline earnings, compared to their previous nine-month results, when they release their results in March.

The company issued a trading update last Wednesday.

The group's financial results are expected to show a substantial improvement in total earnings (+30%) attributable to shareholders and headline earnings for the 12 months ended 31 December 2003, compared to those for the 9 months to 31 December 2002.

The health warning is the fact that the auditors haven't signed off on the numbers yet.

Angelo Coppola spoke to Nombini Mehlomakulu, head of investor relations at Sage Group who started off by saying: "The report was merely a trading update. The full and final picture will become clearer when the annual results will be announced on 17 March 2003.

"The year-end actuarial valuation has not been completed."

FA News: Where did you make money, if new business was down, expenses were

slightly up, and surrenders were up.

"Life companies in the main make money on the existing book and out of investments in the shareholder funds. New business is normally a drain on profits," explains Mehlomakulu.

FA News: Are your reporting any income from the closed USA operation sale?

"No. In our 2002 accounts provisions were made for run-offs in the major expenses and in our 2003 accounts we will be in a position to review the appropriation of these provisions.

"There may be positive or negative adjustments and this will be disclosed in our 2003 accounts," says Mehlomakulu.

New Business down on all counts

Total South African life new business for the 12 months under review showed a decline of 24,5% to R329,5 million compared to the previous year in terms of Annual Premium Equivalent (annualised recurring premiums and 10% of single premiums).

Total new business in the individual division declined by 25,6% for the year to R259,2 million, with the second half of the year showing an improvement of 18,7% over the first half.

In the Employee Benefits division, new business decreased by 20% year-on-year to R70,3 million.

External sales by Sage Unit Trusts for the 12 months totalled R755,4 million, compared with R 1 438,7 million in the previous year, with the second half of the year showing an improvement of 31% over the first half.

Lapses and surrenders

There has been an improvement in the trend of policy discontinuances through lapsing and surrenders during the second half of the year. The number of policies lapsed during the 12 months decreased by 1,3% while the number of policies surrendered increased by 4,4% year on year.

The number of policies surrendered in the second half declined by 11% compared to the first half and were 6% below those of the second half of 2002. The value of in force annualised premiums has declined marginally to R 1 017 million at 31 December 2003 compared to R 1 027 million at 31 December 2002.

Mehlomakulu explains: "We do not disclose this number and prefer to disclose the overall trend."

Investments

Sage Life's money weighted average fund investment returns for 2003 were as follows:

* Individual domestic portfolios 19,8% (3% in 2002)

* Individual foreign portfolios -1,2% (-25,6% in 2002)

* Employee Benefits linked portfolios 19,3% (-3% in 2002)

* In addition shareholder funds benefited directly from the positive performance of the ABSA holding.

Financial Results

The second half of the year saw an improvement in business unit operational performance as a result of the new business, expense management, policy discontinuance and investment trends outlined above.

At Group level, the Equity Linked Notes (ELN's) remain fully hedged against the movement in the rand/dollar exchange rate but their value will be impacted by the embedded derivative to be fair valued in terms of AC133.

"The ELN's are hedged against the movement in the rand/dollar exchange rate meaning that their value will not fluctuate as the currency fluctuates," reports Mehlomakulu.

"We will reflect neither a profit nor a loss as a result of currency fluctuations. However the nominal value of the bond in dollar terms may fluctuate as a result of the option that bond holders have relating to the ABSA share price in dollar terms."

Full details of this option were disclosed in the 2002 annual report.

The company issued a trading update last Wednesday.

The group's financial results are expected to show a substantial improvement in total earnings (+30%) attributable to shareholders and headline earnings for the 12 months ended 31 December 2003, compared to those for the 9 months to 31 December 2002.

The health warning is the fact that the auditors haven't signed off on the numbers yet.

Angelo Coppola spoke to Nombini Mehlomakulu, head of investor relations at Sage Group who started off by saying: "The report was merely a trading update. The full and final picture will become clearer when the annual results will be announced on 17 March 2003.

"The year-end actuarial valuation has not been completed."

FA News: Where did you make money, if new business was down, expenses were

slightly up, and surrenders were up.

"Life companies in the main make money on the existing book and out of investments in the shareholder funds. New business is normally a drain on profits," explains Mehlomakulu.

FA News: Are your reporting any income from the closed USA operation sale?

"No. In our 2002 accounts provisions were made for run-offs in the major expenses and in our 2003 accounts we will be in a position to review the appropriation of these provisions.

"There may be positive or negative adjustments and this will be disclosed in our 2003 accounts," says Mehlomakulu.

New Business down on all counts

Total South African life new business for the 12 months under review showed a decline of 24,5% to R329,5 million compared to the previous year in terms of Annual Premium Equivalent (annualised recurring premiums and 10% of single premiums).

Total new business in the individual division declined by 25,6% for the year to R259,2 million, with the second half of the year showing an improvement of 18,7% over the first half.

In the Employee Benefits division, new business decreased by 20% year-on-year to R70,3 million.

External sales by Sage Unit Trusts for the 12 months totalled R755,4 million, compared with R 1 438,7 million in the previous year, with the second half of the year showing an improvement of 31% over the first half.

Lapses and surrenders

There has been an improvement in the trend of policy discontinuances through lapsing and surrenders during the second half of the year. The number of policies lapsed during the 12 months decreased by 1,3% while the number of policies surrendered increased by 4,4% year on year.

The number of policies surrendered in the second half declined by 11% compared to the first half and were 6% below those of the second half of 2002. The value of in force annualised premiums has declined marginally to R 1 017 million at 31 December 2003 compared to R 1 027 million at 31 December 2002.

Mehlomakulu explains: "We do not disclose this number and prefer to disclose the overall trend."

Investments

Sage Life's money weighted average fund investment returns for 2003 were as follows:

* Individual domestic portfolios 19,8% (3% in 2002)

* Individual foreign portfolios -1,2% (-25,6% in 2002)

* Employee Benefits linked portfolios 19,3% (-3% in 2002)

* In addition shareholder funds benefited directly from the positive performance of the ABSA holding.

Financial Results

The second half of the year saw an improvement in business unit operational performance as a result of the new business, expense management, policy discontinuance and investment trends outlined above.

At Group level, the Equity Linked Notes (ELN's) remain fully hedged against the movement in the rand/dollar exchange rate but their value will be impacted by the embedded derivative to be fair valued in terms of AC133.

"The ELN's are hedged against the movement in the rand/dollar exchange rate meaning that their value will not fluctuate as the currency fluctuates," reports Mehlomakulu.

"We will reflect neither a profit nor a loss as a result of currency fluctuations. However the nominal value of the bond in dollar terms may fluctuate as a result of the option that bond holders have relating to the ABSA share price in dollar terms."

Full details of this option were disclosed in the 2002 annual report.

The company issued a trading update last Wednesday.

The group's financial results are expected to show a substantial improvement in total earnings (+30%) attributable to shareholders and headline earnings for the 12 months ended 31 December 2003, compared to those for the 9 months to 31 December 2002.

The health warning is the fact that the auditors haven't signed off on the numbers yet.

Angelo Coppola spoke to Nombini Mehlomakulu, head of investor relations at Sage Group who started off by saying: "The report was merely a trading update. The full and final picture will become clearer when the annual results will be announced on 17 March 2003.

"The year-end actuarial valuation has not been completed."

FA News: Where did you make money, if new business was down, expenses were

slightly up, and surrenders were up.

"Life companies in the main make money on the existing book and out of investments in the shareholder funds. New business is normally a drain on profits," explains Mehlomakulu.

FA News: Are your reporting any income from the closed USA operation sale?

"No. In our 2002 accounts provisions were made for run-offs in the major expenses and in our 2003 accounts we will be in a position to review the appropriation of these provisions.

"There may be positive or negative adjustments and this will be disclosed in our 2003 accounts," says Mehlomakulu.

New Business down on all counts

Total South African life new business for the 12 months under review showed a decline of 24,5% to R329,5 million compared to the previous year in terms of Annual Premium Equivalent (annualised recurring premiums and 10% of single premiums).

Total new business in the individual division declined by 25,6% for the year to R259,2 million, with the second half of the year showing an improvement of 18,7% over the first half.

In the Employee Benefits division, new business decreased by 20% year-on-year to R70,3 million.

External sales by Sage Unit Trusts for the 12 months totalled R755,4 million, compared with R 1 438,7 million in the previous year, with the second half of the year showing an improvement of 31% over the first half.

Lapses and surrenders

There has been an improvement in the trend of policy discontinuances through lapsing and surrenders during the second half of the year. The number of policies lapsed during the 12 months decreased by 1,3% while the number of policies surrendered increased by 4,4% year on year.

The number of policies surrendered in the second half declined by 11% compared to the first half and were 6% below those of the second half of 2002. The value of in force annualised premiums has declined marginally to R 1 017 million at 31 December 2003 compared to R 1 027 million at 31 December 2002.

Mehlomakulu explains: "We do not disclose this number and prefer to disclose the overall trend."

Investments

Sage Life's money weighted average fund investment returns for 2003 were as follows:

* Individual domestic portfolios 19,8% (3% in 2002)

* Individual foreign portfolios -1,2% (-25,6% in 2002)

* Employee Benefits linked portfolios 19,3% (-3% in 2002)

* In addition shareholder funds benefited directly from the positive performance of the ABSA holding.

Financial Results

The second half of the year saw an improvement in business unit operational performance as a result of the new business, expense management, policy discontinuance and investment trends outlined above.

At Group level, the Equity Linked Notes (ELN's) remain fully hedged against the movement in the rand/dollar exchange rate but their value will be impacted by the embedded derivative to be fair valued in terms of AC133.

"The ELN's are hedged against the movement in the rand/dollar exchange rate meaning that their value will not fluctuate as the currency fluctuates," reports Mehlomakulu.

"We will reflect neither a profit nor a loss as a result of currency fluctuations. However the nominal value of the bond in dollar terms may fluctuate as a result of the option that bond holders have relating to the ABSA share price in dollar terms."

Full details of this option were disclosed in the 2002 annual report.

The company issued a trading update last Wednesday.

The group's financial results are expected to show a substantial improvement in total earnings (+30%) attributable to shareholders and headline earnings for the 12 months ended 31 December 2003, compared to those for the 9 months to 31 December 2002.

The health warning is the fact that the auditors haven't signed off on the numbers yet.

Angelo Coppola spoke to Nombini Mehlomakulu, head of investor relations at Sage Group who started off by saying: "The report was merely a trading update. The full and final picture will become clearer when the annual results will be announced on 17 March 2003.

"The year-end actuarial valuation has not been completed."

FA News: Where did you make money, if new business was down, expenses were

slightly up, and surrenders were up.

"Life companies in the main make money on the existing book and out of investments in the shareholder funds. New business is normally a drain on profits," explains Mehlomakulu.

FA News: Are your reporting any income from the closed USA operation sale?

"No. In our 2002 accounts provisions were made for run-offs in the major expenses and in our 2003 accounts we will be in a position to review the appropriation of these provisions.

"There may be positive or negative adjustments and this will be disclosed in our 2003 accounts," says Mehlomakulu.

New Business down on all counts

Total South African life new business for the 12 months under review showed a decline of 24,5% to R329,5 million compared to the previous year in terms of Annual Premium Equivalent (annualised recurring premiums and 10% of single premiums).

Total new business in the individual division declined by 25,6% for the year to R259,2 million, with the second half of the year showing an improvement of 18,7% over the first half.

In the Employee Benefits division, new business decreased by 20% year-on-year to R70,3 million.

External sales by Sage Unit Trusts for the 12 months totalled R755,4 million, compared with R 1 438,7 million in the previous year, with the second half of the year showing an improvement of 31% over the first half.

Lapses and surrenders

There has been an improvement in the trend of policy discontinuances through lapsing and surrenders during the second half of the year. The number of policies lapsed during the 12 months decreased by 1,3% while the number of policies surrendered increased by 4,4% year on year.

The number of policies surrendered in the second half declined by 11% compared to the first half and were 6% below those of the second half of 2002. The value of in force annualised premiums has declined marginally to R 1 017 million at 31 December 2003 compared to R 1 027 million at 31 December 2002.

Mehlomakulu explains: "We do not disclose this number and prefer to disclose the overall trend."

Investments

Sage Life's money weighted average fund investment returns for 2003 were as follows:

* Individual domestic portfolios 19,8% (3% in 2002)

* Individual foreign portfolios -1,2% (-25,6% in 2002)

* Employee Benefits linked portfolios 19,3% (-3% in 2002)

* In addition shareholder funds benefited directly from the positive performance of the ABSA holding.

Financial Results

The second half of the year saw an improvement in business unit operational performance as a result of the new business, expense management, policy discontinuance and investment trends outlined above.

At Group level, the Equity Linked Notes (ELN's) remain fully hedged against the movement in the rand/dollar exchange rate but their value will be impacted by the embedded derivative to be fair valued in terms of AC133.

"The ELN's are hedged against the movement in the rand/dollar exchange rate meaning that their value will not fluctuate as the currency fluctuates," reports Mehlomakulu.

"We will reflect neither a profit nor a loss as a result of currency fluctuations. However the nominal value of the bond in dollar terms may fluctuate as a result of the option that bond holders have relating to the ABSA share price in dollar terms."

Full details of this option were disclosed in the 2002 annual report.

The company issued a trading update last Wednesday.

The group's financial results are expected to show a substantial improvement in total earnings (+30%) attributable to shareholders and headline earnings for the 12 months ended 31 December 2003, compared to those for the 9 months to 31 December 2002.

The health warning is the fact that the auditors haven't signed off on the numbers yet.

Angelo Coppola spoke to Nombini Mehlomakulu, head of investor relations at Sage Group who started off by saying: "The report was merely a trading update. The full and final picture will become clearer when the annual results will be announced on 17 March 2003.

"The year-end actuarial valuation has not been completed."

FA News: Where did you make money, if new business was down, expenses were

slightly up, and surrenders were up.

"Life companies in the main make money on the existing book and out of investments in the shareholder funds. New business is normally a drain on profits," explains Mehlomakulu.

FA News: Are your reporting any income from the closed USA operation sale?

"No. In our 2002 accounts provisions were made for run-offs in the major expenses and in our 2003 accounts we will be in a position to review the appropriation of these provisions.

"There may be positive or negative adjustments and this will be disclosed in our 2003 accounts," says Mehlomakulu.

New Business down on all counts

Total South African life new business for the 12 months under review showed a decline of 24,5% to R329,5 million compared to the previous year in terms of Annual Premium Equivalent (annualised recurring premiums and 10% of single premiums).

Total new business in the individual division declined by 25,6% for the year to R259,2 million, with the second half of the year showing an improvement of 18,7% over the first half.

In the Employee Benefits division, new business decreased by 20% year-on-year to R70,3 million.

External sales by Sage Unit Trusts for the 12 months totalled R755,4 million, compared with R 1 438,7 million in the previous year, with the second half of the year showing an improvement of 31% over the first half.

Lapses and surrenders

There has been an improvement in the trend of policy discontinuances through lapsing and surrenders during the second half of the year. The number of policies lapsed during the 12 months decreased by 1,3% while the number of policies surrendered increased by 4,4% year on year.

The number of policies surrendered in the second half declined by 11% compared to the first half and were 6% below those of the second half of 2002. The value of in force annualised premiums has declined marginally to R 1 017 million at 31 December 2003 compared to R 1 027 million at 31 December 2002.

Mehlomakulu explains: "We do not disclose this number and prefer to disclose the overall trend."

Investments

Sage Life's money weighted average fund investment returns for 2003 were as follows:

* Individual domestic portfolios 19,8% (3% in 2002)

* Individual foreign portfolios -1,2% (-25,6% in 2002)

* Employee Benefits linked portfolios 19,3% (-3% in 2002)

* In addition shareholder funds benefited directly from the positive performance of the ABSA holding.

Financial Results

The second half of the year saw an improvement in business unit operational performance as a result of the new business, expense management, policy discontinuance and investment trends outlined above.

At Group level, the Equity Linked Notes (ELN's) remain fully hedged against the movement in the rand/dollar exchange rate but their value will be impacted by the embedded derivative to be fair valued in terms of AC133.

"The ELN's are hedged against the movement in the rand/dollar exchange rate meaning that their value will not fluctuate as the currency fluctuates," reports Mehlomakulu.

"We will reflect neither a profit nor a loss as a result of currency fluctuations. However the nominal value of the bond in dollar terms may fluctuate as a result of the option that bond holders have relating to the ABSA share price in dollar terms."

Full details of this option were disclosed in the 2002 annual report.

The company issued a trading update last Wednesday.

The group's financial results are expected to show a substantial improvement in total earnings (+30%) attributable to shareholders and headline earnings for the 12 months ended 31 December 2003, compared to those for the 9 months to 31 December 2002.

The health warning is the fact that the auditors haven't signed off on the numbers yet.

Angelo Coppola spoke to Nombini Mehlomakulu, head of investor relations at Sage Group who started off by saying: "The report was merely a trading update. The full and final picture will become clearer when the annual results will be announced on 17 March 2003.

"The year-end actuarial valuation has not been completed."

FA News: Where did you make money, if new business was down, expenses were

slightly up, and surrenders were up.

"Life companies in the main make money on the existing book and out of investments in the shareholder funds. New business is normally a drain on profits," explains Mehlomakulu.

FA News: Are your reporting any income from the closed USA operation sale?

"No. In our 2002 accounts provisions were made for run-offs in the major expenses and in our 2003 accounts we will be in a position to review the appropriation of these provisions.

"There may be positive or negative adjustments and this will be disclosed in our 2003 accounts," says Mehlomakulu.

New Business down on all counts

Total South African life new business for the 12 months under review showed a decline of 24,5% to R329,5 million compared to the previous year in terms of Annual Premium Equivalent (annualised recurring premiums and 10% of single premiums).

Total new business in the individual division declined by 25,6% for the year to R259,2 million, with the second half of the year showing an improvement of 18,7% over the first half.

In the Employee Benefits division, new business decreased by 20% year-on-year to R70,3 million.

External sales by Sage Unit Trusts for the 12 months totalled R755,4 million, compared with R 1 438,7 million in the previous year, with the second half of the year showing an improvement of 31% over the first half.

Lapses and surrenders

There has been an improvement in the trend of policy discontinuances through lapsing and surrenders during the second half of the year. The number of policies lapsed during the 12 months decreased by 1,3% while the number of policies surrendered increased by 4,4% year on year.

The number of policies surrendered in the second half declined by 11% compared to the first half and were 6% below those of the second half of 2002. The value of in force annualised premiums has declined marginally to R 1 017 million at 31 December 2003 compared to R 1 027 million at 31 December 2002.

Mehlomakulu explains: "We do not disclose this number and prefer to disclose the overall trend."

Investments

Sage Life's money weighted average fund investment returns for 2003 were as follows:

* Individual domestic portfolios 19,8% (3% in 2002)

* Individual foreign portfolios -1,2% (-25,6% in 2002)

* Employee Benefits linked portfolios 19,3% (-3% in 2002)

* In addition shareholder funds benefited directly from the positive performance of the ABSA holding.

Financial Results

The second half of the year saw an improvement in business unit operational performance as a result of the new business, expense management, policy discontinuance and investment trends outlined above.

At Group level, the Equity Linked Notes (ELN's) remain fully hedged against the movement in the rand/dollar exchange rate but their value will be impacted by the embedded derivative to be fair valued in terms of AC133.

"The ELN's are hedged against the movement in the rand/dollar exchange rate meaning that their value will not fluctuate as the currency fluctuates," reports Mehlomakulu.

"We will reflect neither a profit nor a loss as a result of currency fluctuations. However the nominal value of the bond in dollar terms may fluctuate as a result of the option that bond holders have relating to the ABSA share price in dollar terms."

Full details of this option were disclosed in the 2002 annual report.

The company issued a trading update last Wednesday.

The group's financial results are expected to show a substantial improvement in total earnings (+30%) attributable to shareholders and headline earnings for the 12 months ended 31 December 2003, compared to those for the 9 months to 31 December 2002.

The health warning is the fact that the auditors haven't signed off on the numbers yet.

Angelo Coppola spoke to Nombini Mehlomakulu, head of investor relations at Sage Group who started off by saying: "The report was merely a trading update. The full and final picture will become clearer when the annual results will be announced on 17 March 2003.

"The year-end actuarial valuation has not been completed."

FA News: Where did you make money, if new business was down, expenses were

slightly up, and surrenders were up.

"Life companies in the main make money on the existing book and out of investments in the shareholder funds. New business is normally a drain on profits," explains Mehlomakulu.

FA News: Are your reporting any income from the closed USA operation sale?

"No. In our 2002 accounts provisions were made for run-offs in the major expenses and in our 2003 accounts we will be in a position to review the appropriation of these provisions.

"There may be positive or negative adjustments and this will be disclosed in our 2003 accounts," says Mehlomakulu.

New Business down on all counts

Total South African life new business for the 12 months under review showed a decline of 24,5% to R329,5 million compared to the previous year in terms of Annual Premium Equivalent (annualised recurring premiums and 10% of single premiums).

Total new business in the individual division declined by 25,6% for the year to R259,2 million, with the second half of the year showing an improvement of 18,7% over the first half.

In the Employee Benefits division, new business decreased by 20% year-on-year to R70,3 million.

External sales by Sage Unit Trusts for the 12 months totalled R755,4 million, compared with R 1 438,7 million in the previous year, with the second half of the year showing an improvement of 31% over the first half.

Lapses and surrenders

There has been an improvement in the trend of policy discontinuances through lapsing and surrenders during the second half of the year. The number of policies lapsed during the 12 months decreased by 1,3% while the number of policies surrendered increased by 4,4% year on year.

The number of policies surrendered in the second half declined by 11% compared to the first half and were 6% below those of the second half of 2002. The value of in force annualised premiums has declined marginally to R 1 017 million at 31 December 2003 compared to R 1 027 million at 31 December 2002.

Mehlomakulu explains: "We do not disclose this number and prefer to disclose the overall trend."

Investments

Sage Life's money weighted average fund investment returns for 2003 were as follows:

* Individual domestic portfolios 19,8% (3% in 2002)

* Individual foreign portfolios -1,2% (-25,6% in 2002)

* Employee Benefits linked portfolios 19,3% (-3% in 2002)

* In addition shareholder funds benefited directly from the positive performance of the ABSA holding.

Financial Results

The second half of the year saw an improvement in business unit operational performance as a result of the new business, expense management, policy discontinuance and investment trends outlined above.

At Group level, the Equity Linked Notes (ELN's) remain fully hedged against the movement in the rand/dollar exchange rate but their value will be impacted by the embedded derivative to be fair valued in terms of AC133.

"The ELN's are hedged against the movement in the rand/dollar exchange rate meaning that their value will not fluctuate as the currency fluctuates," reports Mehlomakulu.

"We will reflect neither a profit nor a loss as a result of currency fluctuations. However the nominal value of the bond in dollar terms may fluctuate as a result of the option that bond holders have relating to the ABSA share price in dollar terms."

Full details of this option were disclosed in the 2002 annual report.

The company issued a trading update last Wednesday.

The group's financial results are expected to show a substantial improvement in total earnings (+30%) attributable to shareholders and headline earnings for the 12 months ended 31 December 2003, compared to those for the 9 months to 31 December 2002.

The health warning is the fact that the auditors haven't signed off on the numbers yet.

Angelo Coppola spoke to Nombini Mehlomakulu, head of investor relations at Sage Group who started off by saying: "The report was merely a trading update. The full and final picture will become clearer when the annual results will be announced on 17 March 2003.

"The year-end actuarial valuation has not been completed."

FA News: Where did you make money, if new business was down, expenses were

slightly up, and surrenders were up.

"Life companies in the main make money on the existing book and out of investments in the shareholder funds. New business is normally a drain on profits," explains Mehlomakulu.

FA News: Are your reporting any income from the closed USA operation sale?

"No. In our 2002 accounts provisions were made for run-offs in the major expenses and in our 2003 accounts we will be in a position to review the appropriation of these provisions.

"There may be positive or negative adjustments and this will be disclosed in our 2003 accounts," says Mehlomakulu.

New Business down on all counts

Total South African life new business for the 12 months under review showed a decline of 24,5% to R329,5 million compared to the previous year in terms of Annual Premium Equivalent (annualised recurring premiums and 10% of single premiums).

Total new business in the individual division declined by 25,6% for the year to R259,2 million, with the second half of the year showing an improvement of 18,7% over the first half.

In the Employee Benefits division, new business decreased by 20% year-on-year to R70,3 million.

External sales by Sage Unit Trusts for the 12 months totalled R755,4 million, compared with R 1 438,7 million in the previous year, with the second half of the year showing an improvement of 31% over the first half.

Lapses and surrenders

There has been an improvement in the trend of policy discontinuances through lapsing and surrenders during the second half of the year. The number of policies lapsed during the 12 months decreased by 1,3% while the number of policies surrendered increased by 4,4% year on year.

The number of policies surrendered in the second half declined by 11% compared to the first half and were 6% below those of the second half of 2002. The value of in force annualised premiums has declined marginally to R 1 017 million at 31 December 2003 compared to R 1 027 million at 31 December 2002.

Mehlomakulu explains: "We do not disclose this number and prefer to disclose the overall trend."

Investments

Sage Life's money weighted average fund investment returns for 2003 were as follows:

* Individual domestic portfolios 19,8% (3% in 2002)

* Individual foreign portfolios -1,2% (-25,6% in 2002)

* Employee Benefits linked portfolios 19,3% (-3% in 2002)

* In addition shareholder funds benefited directly from the positive performance of the ABSA holding.

Financial Results

The second half of the year saw an improvement in business unit operational performance as a result of the new business, expense management, policy discontinuance and investment trends outlined above.

At Group level, the Equity Linked Notes (ELN's) remain fully hedged against the movement in the rand/dollar exchange rate but their value will be impacted by the embedded derivative to be fair valued in terms of AC133.

"The ELN's are hedged against the movement in the rand/dollar exchange rate meaning that their value will not fluctuate as the currency fluctuates," reports Mehlomakulu.

"We will reflect neither a profit nor a loss as a result of currency fluctuations. However the nominal value of the bond in dollar terms may fluctuate as a result of the option that bond holders have relating to the ABSA share price in dollar terms."

Full details of this option were disclosed in the 2002 annual report.

The company issued a trading update last Wednesday.

The group's financial results are expected to show a substantial improvement in total earnings (+30%) attributable to shareholders and headline earnings for the 12 months ended 31 December 2003, compared to those for the 9 months to 31 December 2002.

The health warning is the fact that the auditors haven't signed off on the numbers yet.

Angelo Coppola spoke to Nombini Mehlomakulu, head of investor relations at Sage Group who started off by saying: "The report was merely a trading update. The full and final picture will become clearer when the annual results will be announced on 17 March 2003.

"The year-end actuarial valuation has not been completed."

FA News: Where did you make money, if new business was down, expenses were

slightly up, and surrenders were up.

"Life companies in the main make money on the existing book and out of investments in the shareholder funds. New business is normally a drain on profits," explains Mehlomakulu.

FA News: Are your reporting any income from the closed USA operation sale?

"No. In our 2002 accounts provisions were made for run-offs in the major expenses and in our 2003 accounts we will be in a position to review the appropriation of these provisions.

"There may be positive or negative adjustments and this will be disclosed in our 2003 accounts," says Mehlomakulu.

New Business down on all counts

Total South African life new business for the 12 months under review showed a decline of 24,5% to R329,5 million compared to the previous year in terms of Annual Premium Equivalent (annualised recurring premiums and 10% of single premiums).

Total new business in the individual division declined by 25,6% for the year to R259,2 million, with the second half of the year showing an improvement of 18,7% over the first half.

In the Employee Benefits division, new business decreased by 20% year-on-year to R70,3 million.

External sales by Sage Unit Trusts for the 12 months totalled R755,4 million, compared with R 1 438,7 million in the previous year, with the second half of the year showing an improvement of 31% over the first half.

Lapses and surrenders

There has been an improvement in the trend of policy discontinuances through lapsing and surrenders during the second half of the year. The number of policies lapsed during the 12 months decreased by 1,3% while the number of policies surrendered increased by 4,4% year on year.

The number of policies surrendered in the second half declined by 11% compared to the first half and were 6% below those of the second half of 2002. The value of in force annualised premiums has declined marginally to R 1 017 million at 31 December 2003 compared to R 1 027 million at 31 December 2002.

Mehlomakulu explains: "We do not disclose this number and prefer to disclose the overall trend."

Investments

Sage Life's money weighted average fund investment returns for 2003 were as follows:

* Individual domestic portfolios 19,8% (3% in 2002)

* Individual foreign portfolios -1,2% (-25,6% in 2002)

* Employee Benefits linked portfolios 19,3% (-3% in 2002)

* In addition shareholder funds benefited directly from the positive performance of the ABSA holding.

Financial Results

The second half of the year saw an improvement in business unit operational performance as a result of the new business, expense management, policy discontinuance and investment trends outlined above.

At Group level, the Equity Linked Notes (ELN's) remain fully hedged against the movement in the rand/dollar exchange rate but their value will be impacted by the embedded derivative to be fair valued in terms of AC133.

"The ELN's are hedged against the movement in the rand/dollar exchange rate meaning that their value will not fluctuate as the currency fluctuates," reports Mehlomakulu.

"We will reflect neither a profit nor a loss as a result of currency fluctuations. However the nominal value of the bond in dollar terms may fluctuate as a result of the option that bond holders have relating to the ABSA share price in dollar terms."

Full details of this option were disclosed in the 2002 annual report.

The company issued a trading update last Wednesday.

The group's financial results are expected to show a substantial improvement in total earnings (+30%) attributable to shareholders and headline earnings for the 12 months ended 31 December 2003, compared to those for the 9 months to 31 December 2002.

The health warning is the fact that the auditors haven't signed off on the numbers yet.

Angelo Coppola spoke to Nombini Mehlomakulu, head of investor relations at Sage Group who started off by saying: "The report was merely a trading update. The full and final picture will become clearer when the annual results will be announced on 17 March 2003.

"The year-end actuarial valuation has not been completed."

FA News: Where did you make money, if new business was down, expenses were

slightly up, and surrenders were up.

"Life companies in the main make money on the existing book and out of investments in the shareholder funds. New business is normally a drain on profits," explains Mehlomakulu.

FA News: Are your reporting any income from the closed USA operation sale?

"No. In our 2002 accounts provisions were made for run-offs in the major expenses and in our 2003 accounts we will be in a position to review the appropriation of these provisions.

"There may be positive or negative adjustments and this will be disclosed in our 2003 accounts," says Mehlomakulu.

New Business down on all counts

Total South African life new business for the 12 months under review showed a decline of 24,5% to R329,5 million compared to the previous year in terms of Annual Premium Equivalent (annualised recurring premiums and 10% of single premiums).

Total new business in the individual division declined by 25,6% for the year to R259,2 million, with the second half of the year showing an improvement of 18,7% over the first half.

In the Employee Benefits division, new business decreased by 20% year-on-year to R70,3 million.

External sales by Sage Unit Trusts for the 12 months totalled R755,4 million, compared with R 1 438,7 million in the previous year, with the second half of the year showing an improvement of 31% over the first half.

Lapses and surrenders

There has been an improvement in the trend of policy discontinuances through lapsing and surrenders during the second half of the year. The number of policies lapsed during the 12 months decreased by 1,3% while the number of policies surrendered increased by 4,4% year on year.

The number of policies surrendered in the second half declined by 11% compared to the first half and were 6% below those of the second half of 2002. The value of in force annualised premiums has declined marginally to R 1 017 million at 31 December 2003 compared to R 1 027 million at 31 December 2002.

Mehlomakulu explains: "We do not disclose this number and prefer to disclose the overall trend."

Investments

Sage Life's money weighted average fund investment returns for 2003 were as follows:

* Individual domestic portfolios 19,8% (3% in 2002)

* Individual foreign portfolios -1,2% (-25,6% in 2002)

* Employee Benefits linked portfolios 19,3% (-3% in 2002)

* In addition shareholder funds benefited directly from the positive performance of the ABSA holding.

Financial Results

The second half of the year saw an improvement in business unit operational performance as a result of the new business, expense management, policy discontinuance and investment trends outlined above.

At Group level, the Equity Linked Notes (ELN's) remain fully hedged against the movement in the rand/dollar exchange rate but their value will be impacted by the embedded derivative to be fair valued in terms of AC133.

"The ELN's are hedged against the movement in the rand/dollar exchange rate meaning that their value will not fluctuate as the currency fluctuates," reports Mehlomakulu.

"We will reflect neither a profit nor a loss as a result of currency fluctuations. However the nominal value of the bond in dollar terms may fluctuate as a result of the option that bond holders have relating to the ABSA share price in dollar terms."

Full details of this option were disclosed in the 2002 annual report.

The company issued a trading update last Wednesday.

The group's financial results are expected to show a substantial improvement in total earnings (+30%) attributable to shareholders and headline earnings for the 12 months ended 31 December 2003, compared to those for the 9 months to 31 December 2002.

The health warning is the fact that the auditors haven't signed off on the numbers yet.

Angelo Coppola spoke to Nombini Mehlomakulu, head of investor relations at Sage Group who started off by saying: "The report was merely a trading update. The full and final picture will become clearer when the annual results will be announced on 17 March 2003.

"The year-end actuarial valuation has not been completed."

FA News: Where did you make money, if new business was down, expenses were

slightly up, and surrenders were up.

"Life companies in the main make money on the existing book and out of investments in the shareholder funds. New business is normally a drain on profits," explains Mehlomakulu.

FA News: Are your reporting any income from the closed USA operation sale?

"No. In our 2002 accounts provisions were made for run-offs in the major expenses and in our 2003 accounts we will be in a position to review the appropriation of these provisions.

"There may be positive or negative adjustments and this will be disclosed in our 2003 accounts," says Mehlomakulu.

New Business down on all counts

Total South African life new business for the 12 months under review showed a decline of 24,5% to R329,5 million compared to the previous year in terms of Annual Premium Equivalent (annualised recurring premiums and 10% of single premiums).

Total new business in the individual division declined by 25,6% for the year to R259,2 million, with the second half of the year showing an improvement of 18,7% over the first half.

In the Employee Benefits division, new business decreased by 20% year-on-year to R70,3 million.

External sales by Sage Unit Trusts for the 12 months totalled R755,4 million, compared with R 1 438,7 million in the previous year, with the second half of the year showing an improvement of 31% over the first half.

Lapses and surrenders

There has been an improvement in the trend of policy discontinuances through lapsing and surrenders during the second half of the year. The number of policies lapsed during the 12 months decreased by 1,3% while the number of policies surrendered increased by 4,4% year on year.

The number of policies surrendered in the second half declined by 11% compared to the first half and were 6% below those of the second half of 2002. The value of in force annualised premiums has declined marginally to R 1 017 million at 31 December 2003 compared to R 1 027 million at 31 December 2002.

Mehlomakulu explains: "We do not disclose this number and prefer to disclose the overall trend."

Investments

Sage Life's money weighted average fund investment returns for 2003 were as follows:

* Individual domestic portfolios 19,8% (3% in 2002)

* Individual foreign portfolios -1,2% (-25,6% in 2002)

* Employee Benefits linked portfolios 19,3% (-3% in 2002)

* In addition shareholder funds benefited directly from the positive performance of the ABSA holding.

Financial Results

The second half of the year saw an improvement in business unit operational performance as a result of the new business, expense management, policy discontinuance and investment trends outlined above.

At Group level, the Equity Linked Notes (ELN's) remain fully hedged against the movement in the rand/dollar exchange rate but their value will be impacted by the embedded derivative to be fair valued in terms of AC133.

"The ELN's are hedged against the movement in the rand/dollar exchange rate meaning that their value will not fluctuate as the currency fluctuates," reports Mehlomakulu.

"We will reflect neither a profit nor a loss as a result of currency fluctuations. However the nominal value of the bond in dollar terms may fluctuate as a result of the option that bond holders have relating to the ABSA share price in dollar terms."

Full details of this option were disclosed in the 2002 annual report.

The company issued a trading update last Wednesday.

The group's financial results are expected to show a substantial improvement in total earnings (+30%) attributable to shareholders and headline earnings for the 12 months ended 31 December 2003, compared to those for the 9 months to 31 December 2002.

The health warning is the fact that the auditors haven't signed off on the numbers yet.

Angelo Coppola spoke to Nombini Mehlomakulu, head of investor relations at Sage Group who started off by saying: "The report was merely a trading update. The full and final picture will become clearer when the annual results will be announced on 17 March 2003.

"The year-end actuarial valuation has not been completed."

FA News: Where did you make money, if new business was down, expenses were

slightly up, and surrenders were up.

"Life companies in the main make money on the existing book and out of investments in the shareholder funds. New business is normally a drain on profits," explains Mehlomakulu.

FA News: Are your reporting any income from the closed USA operation sale?

"No. In our 2002 accounts provisions were made for run-offs in the major expenses and in our 2003 accounts we will be in a position to review the appropriation of these provisions.

"There may be positive or negative adjustments and this will be disclosed in our 2003 accounts," says Mehlomakulu.

New Business down on all counts

Total South African life new business for the 12 months under review showed a decline of 24,5% to R329,5 million compared to the previous year in terms of Annual Premium Equivalent (annualised recurring premiums and 10% of single premiums).

Total new business in the individual division declined by 25,6% for the year to R259,2 million, with the second half of the year showing an improvement of 18,7% over the first half.

In the Employee Benefits division, new business decreased by 20% year-on-year to R70,3 million.

External sales by Sage Unit Trusts for the 12 months totalled R755,4 million, compared with R 1 438,7 million in the previous year, with the second half of the year showing an improvement of 31% over the first half.

Lapses and surrenders

There has been an improvement in the trend of policy discontinuances through lapsing and surrenders during the second half of the year. The number of policies lapsed during the 12 months decreased by 1,3% while the number of policies surrendered increased by 4,4% year on year.

The number of policies surrendered in the second half declined by 11% compared to the first half and were 6% below those of the second half of 2002. The value of in force annualised premiums has declined marginally to R 1 017 million at 31 December 2003 compared to R 1 027 million at 31 December 2002.

Mehlomakulu explains: "We do not disclose this number and prefer to disclose the overall trend."

Investments

Sage Life's money weighted average fund investment returns for 2003 were as follows:

* Individual domestic portfolios 19,8% (3% in 2002)

* Individual foreign portfolios -1,2% (-25,6% in 2002)

* Employee Benefits linked portfolios 19,3% (-3% in 2002)

* In addition shareholder funds benefited directly from the positive performance of the ABSA holding.

Financial Results

The second half of the year saw an improvement in business unit operational performance as a result of the new business, expense management, policy discontinuance and investment trends outlined above.

At Group level, the Equity Linked Notes (ELN's) remain fully hedged against the movement in the rand/dollar exchange rate but their value will be impacted by the embedded derivative to be fair valued in terms of AC133.

"The ELN's are hedged against the movement in the rand/dollar exchange rate meaning that their value will not fluctuate as the currency fluctuates," reports Mehlomakulu.

"We will reflect neither a profit nor a loss as a result of currency fluctuations. However the nominal value of the bond in dollar terms may fluctuate as a result of the option that bond holders have relating to the ABSA share price in dollar terms."

Full details of this option were disclosed in the 2002 annual report.

The company issued a trading update last Wednesday.

The group's financial results are expected to show a substantial improvement in total earnings (+30%) attributable to shareholders and headline earnings for the 12 months ended 31 December 2003, compared to those for the 9 months to 31 December 2002.

The health warning is the fact that the auditors haven't signed off on the numbers yet.

Angelo Coppola spoke to Nombini Mehlomakulu, head of investor relations at Sage Group who started off by saying: "The report was merely a trading update. The full and final picture will become clearer when the annual results will be announced on 17 March 2003.

"The year-end actuarial valuation has not been completed."

FA News: Where did you make money, if new business was down, expenses were

slightly up, and surrenders were up.

"Life companies in the main make money on the existing book and out of investments in the shareholder funds. New business is normally a drain on profits," explains Mehlomakulu.

FA News: Are your reporting any income from the closed USA operation sale?

"No. In our 2002 accounts provisions were made for run-offs in the major expenses and in our 2003 accounts we will be in a position to review the appropriation of these provisions.

"There may be positive or negative adjustments and this will be disclosed in our 2003 accounts," says Mehlomakulu.

New Business down on all counts

Total South African life new business for the 12 months under review showed a decline of 24,5% to R329,5 million compared to the previous year in terms of Annual Premium Equivalent (annualised recurring premiums and 10% of single premiums).

Total new business in the individual division declined by 25,6% for the year to R259,2 million, with the second half of the year showing an improvement of 18,7% over the first half.

In the Employee Benefits division, new business decreased by 20% year-on-year to R70,3 million.

External sales by Sage Unit Trusts for the 12 months totalled R755,4 million, compared with R 1 438,7 million in the previous year, with the second half of the year showing an improvement of 31% over the first half.

Lapses and surrenders

There has been an improvement in the trend of policy discontinuances through lapsing and surrenders during the second half of the year. The number of policies lapsed during the 12 months decreased by 1,3% while the number of policies surrendered increased by 4,4% year on year.

The number of policies surrendered in the second half declined by 11% compared to the first half and were 6% below those of the second half of 2002. The value of in force annualised premiums has declined marginally to R 1 017 million at 31 December 2003 compared to R 1 027 million at 31 December 2002.

Mehlomakulu explains: "We do not disclose this number and prefer to disclose the overall trend."

Investments

Sage Life's money weighted average fund investment returns for 2003 were as follows:

* Individual domestic portfolios 19,8% (3% in 2002)

* Individual foreign portfolios -1,2% (-25,6% in 2002)

* Employee Benefits linked portfolios 19,3% (-3% in 2002)

* In addition shareholder funds benefited directly from the positive performance of the ABSA holding.

Financial Results

The second half of the year saw an improvement in business unit operational performance as a result of the new business, expense management, policy discontinuance and investment trends outlined above.

At Group level, the Equity Linked Notes (ELN's) remain fully hedged against the movement in the rand/dollar exchange rate but their value will be impacted by the embedded derivative to be fair valued in terms of AC133.

"The ELN's are hedged against the movement in the rand/dollar exchange rate meaning that their value will not fluctuate as the currency fluctuates," reports Mehlomakulu.

"We will reflect neither a profit nor a loss as a result of currency fluctuations. However the nominal value of the bond in dollar terms may fluctuate as a result of the option that bond holders have relating to the ABSA share price in dollar terms."

Full details of this option were disclosed in the 2002 annual report.

The company issued a trading update last Wednesday.

The group's financial results are expected to show a substantial improvement in total earnings (+30%) attributable to shareholders and headline earnings for the 12 months ended 31 December 2003, compared to those for the 9 months to 31 December 2002.

The health warning is the fact that the auditors haven't signed off on the numbers yet.

Angelo Coppola spoke to Nombini Mehlomakulu, head of investor relations at Sage Group who started off by saying: "The report was merely a trading update. The full and final picture will become clearer when the annual results will be announced on 17 March 2003.

"The year-end actuarial valuation has not been completed."

FA News: Where did you make money, if new business was down, expenses were

slightly up, and surrenders were up.

"Life companies in the main make money on the existing book and out of investments in the shareholder funds. New business is normally a drain on profits," explains Mehlomakulu.

FA News: Are your reporting any income from the closed USA operation sale?

"No. In our 2002 accounts provisions were made for run-offs in the major expenses and in our 2003 accounts we will be in a position to review the appropriation of these provisions.

"There may be positive or negative adjustments and this will be disclosed in our 2003 accounts," says Mehlomakulu.

New Business down on all counts

Total South African life new business for the 12 months under review showed a decline of 24,5% to R329,5 million compared to the previous year in terms of Annual Premium Equivalent (annualised recurring premiums and 10% of single premiums).

Total new business in the individual division declined by 25,6% for the year to R259,2 million, with the second half of the year showing an improvement of 18,7% over the first half.

In the Employee Benefits division, new business decreased by 20% year-on-year to R70,3 million.

External sales by Sage Unit Trusts for the 12 months totalled R755,4 million, compared with R 1 438,7 million in the previous year, with the second half of the year showing an improvement of 31% over the first half.

Lapses and surrenders

There has been an improvement in the trend of policy discontinuances through lapsing and surrenders during the second half of the year. The number of policies lapsed during the 12 months decreased by 1,3% while the number of policies surrendered increased by 4,4% year on year.

The number of policies surrendered in the second half declined by 11% compared to the first half and were 6% below those of the second half of 2002. The value of in force annualised premiums has declined marginally to R 1 017 million at 31 December 2003 compared to R 1 027 million at 31 December 2002.

Mehlomakulu explains: "We do not disclose this number and prefer to disclose the overall trend."

Investments

Sage Life's money weighted average fund investment returns for 2003 were as follows:

* Individual domestic portfolios 19,8% (3% in 2002)

* Individual foreign portfolios -1,2% (-25,6% in 2002)

* Employee Benefits linked portfolios 19,3% (-3% in 2002)

* In addition shareholder funds benefited directly from the positive performance of the ABSA holding.

Financial Results

The second half of the year saw an improvement in business unit operational performance as a result of the new business, expense management, policy discontinuance and investment trends outlined above.

At Group level, the Equity Linked Notes (ELN's) remain fully hedged against the movement in the rand/dollar exchange rate but their value will be impacted by the embedded derivative to be fair valued in terms of AC133.

"The ELN's are hedged against the movement in the rand/dollar exchange rate meaning that their value will not fluctuate as the currency fluctuates," reports Mehlomakulu.

"We will reflect neither a profit nor a loss as a result of currency fluctuations. However the nominal value of the bond in dollar terms may fluctuate as a result of the option that bond holders have relating to the ABSA share price in dollar terms."

Full details of this option were disclosed in the 2002 annual report.

The company issued a trading update last Wednesday.

The group's financial results are expected to show a substantial improvement in total earnings (+30%) attributable to shareholders and headline earnings for the 12 months ended 31 December 2003, compared to those for the 9 months to 31 December 2002.

The health warning is the fact that the auditors haven't signed off on the numbers yet.

Angelo Coppola spoke to Nombini Mehlomakulu, head of investor relations at Sage Group who started off by saying: "The report was merely a trading update. The full and final picture will become clearer when the annual results will be announced on 17 March 2003.

"The year-end actuarial valuation has not been completed."

FA News: Where did you make money, if new business was down, expenses were

slightly up, and surrenders were up.

"Life companies in the main make money on the existing book and out of investments in the shareholder funds. New business is normally a drain on profits," explains Mehlomakulu.

FA News: Are your reporting any income from the closed USA operation sale?

"No. In our 2002 accounts provisions were made for run-offs in the major expenses and in our 2003 accounts we will be in a position to review the appropriation of these provisions.

"There may be positive or negative adjustments and this will be disclosed in our 2003 accounts," says Mehlomakulu.

New Business down on all counts

Total South African life new business for the 12 months under review showed a decline of 24,5% to R329,5 million compared to the previous year in terms of Annual Premium Equivalent (annualised recurring premiums and 10% of single premiums).

Total new business in the individual division declined by 25,6% for the year to R259,2 million, with the second half of the year showing an improvement of 18,7% over the first half.

In the Employee Benefits division, new business decreased by 20% year-on-year to R70,3 million.

External sales by Sage Unit Trusts for the 12 months totalled R755,4 million, compared with R 1 438,7 million in the previous year, with the second half of the year showing an improvement of 31% over the first half.

Lapses and surrenders

There has been an improvement in the trend of policy discontinuances through lapsing and surrenders during the second half of the year. The number of policies lapsed during the 12 months decreased by 1,3% while the number of policies surrendered increased by 4,4% year on year.

The number of policies surrendered in the second half declined by 11% compared to the first half and were 6% below those of the second half of 2002. The value of in force annualised premiums has declined marginally to R 1 017 million at 31 December 2003 compared to R 1 027 million at 31 December 2002.

Mehlomakulu explains: "We do not disclose this number and prefer to disclose the overall trend."

Investments

Sage Life's money weighted average fund investment returns for 2003 were as follows:

* Individual domestic portfolios 19,8% (3% in 2002)

* Individual foreign portfolios -1,2% (-25,6% in 2002)

* Employee Benefits linked portfolios 19,3% (-3% in 2002)

* In addition shareholder funds benefited directly from the positive performance of the ABSA holding.

Financial Results

The second half of the year saw an improvement in business unit operational performance as a result of the new business, expense management, policy discontinuance and investment trends outlined above.

At Group level, the Equity Linked Notes (ELN's) remain fully hedged against the movement in the rand/dollar exchange rate but their value will be impacted by the embedded derivative to be fair valued in terms of AC133.

"The ELN's are hedged against the movement in the rand/dollar exchange rate meaning that their value will not fluctuate as the currency fluctuates," reports Mehlomakulu.

"We will reflect neither a profit nor a loss as a result of currency fluctuations. However the nominal value of the bond in dollar terms may fluctuate as a result of the option that bond holders have relating to the ABSA share price in dollar terms."

Full details of this option were disclosed in the 2002 annual report.

The company issued a trading update last Wednesday.

The group's financial results are expected to show a substantial improvement in total earnings (+30%) attributable to shareholders and headline earnings for the 12 months ended 31 December 2003, compared to those for the 9 months to 31 December 2002.

The health warning is the fact that the auditors haven't signed off on the numbers yet.

Angelo Coppola spoke to Nombini Mehlomakulu, head of investor relations at Sage Group who started off by saying: "The report was merely a trading update. The full and final picture will become clearer when the annual results will be announced on 17 March 2003.

"The year-end actuarial valuation has not been completed."

FA News: Where did you make money, if new business was down, expenses were

slightly up, and surrenders were up.

"Life companies in the main make money on the existing book and out of investments in the shareholder funds. New business is normally a drain on profits," explains Mehlomakulu.

FA News: Are your reporting any income from the closed USA operation sale?

"No. In our 2002 accounts provisions were made for run-offs in the major expenses and in our 2003 accounts we will be in a position to review the appropriation of these provisions.

"There may be positive or negative adjustments and this will be disclosed in our 2003 accounts," says Mehlomakulu.

New Business down on all counts

Total South African life new business for the 12 months under review showed a decline of 24,5% to R329,5 million compared to the previous year in terms of Annual Premium Equivalent (annualised recurring premiums and 10% of single premiums).

Total new business in the individual division declined by 25,6% for the year to R259,2 million, with the second half of the year showing an improvement of 18,7% over the first half.

In the Employee Benefits division, new business decreased by 20% year-on-year to R70,3 million.

External sales by Sage Unit Trusts for the 12 months totalled R755,4 million, compared with R 1 438,7 million in the previous year, with the second half of the year showing an improvement of 31% over the first half.

Lapses and surrenders

There has been an improvement in the trend of policy discontinuances through lapsing and surrenders during the second half of the year. The number of policies lapsed during the 12 months decreased by 1,3% while the number of policies surrendered increased by 4,4% year on year.

The number of policies surrendered in the second half declined by 11% compared to the first half and were 6% below those of the second half of 2002. The value of in force annualised premiums has declined marginally to R 1 017 million at 31 December 2003 compared to R 1 027 million at 31 December 2002.

Mehlomakulu explains: "We do not disclose this number and prefer to disclose the overall trend."

Investments

Sage Life's money weighted average fund investment returns for 2003 were as follows:

* Individual domestic portfolios 19,8% (3% in 2002)

* Individual foreign portfolios -1,2% (-25,6% in 2002)

* Employee Benefits linked portfolios 19,3% (-3% in 2002)

* In addition shareholder funds benefited directly from the positive performance of the ABSA holding.

Financial Results

The second half of the year saw an improvement in business unit operational performance as a result of the new business, expense management, policy discontinuance and investment trends outlined above.

At Group level, the Equity Linked Notes (ELN's) remain fully hedged against the movement in the rand/dollar exchange rate but their value will be impacted by the embedded derivative to be fair valued in terms of AC133.

"The ELN's are hedged against the movement in the rand/dollar exchange rate meaning that their value will not fluctuate as the currency fluctuates," reports Mehlomakulu.

"We will reflect neither a profit nor a loss as a result of currency fluctuations. However the nominal value of the bond in dollar terms may fluctuate as a result of the option that bond holders have relating to the ABSA share price in dollar terms."

Full details of this option were disclosed in the 2002 annual report.

The company issued a trading update last Wednesday.

The group's financial results are expected to show a substantial improvement in total earnings (+30%) attributable to shareholders and headline earnings for the 12 months ended 31 December 2003, compared to those for the 9 months to 31 December 2002.

The health warning is the fact that the auditors haven't signed off on the numbers yet.

Angelo Coppola spoke to Nombini Mehlomakulu, head of investor relations at Sage Group who started off by saying: "The report was merely a trading update. The full and final picture will become clearer when the annual results will be announced on 17 March 2003.

"The year-end actuarial valuation has not been completed."

FA News: Where did you make money, if new business was down, expenses were

slightly up, and surrenders were up.

"Life companies in the main make money on the existing book and out of investments in the shareholder funds. New business is normally a drain on profits," explains Mehlomakulu.

FA News: Are your reporting any income from the closed USA operation sale?

"No. In our 2002 accounts provisions were made for run-offs in the major expenses and in our 2003 accounts we will be in a position to review the appropriation of these provisions.

"There may be positive or negative adjustments and this will be disclosed in our 2003 accounts," says Mehlomakulu.

New Business down on all counts

Total South African life new business for the 12 months under review showed a decline of 24,5% to R329,5 million compared to the previous year in terms of Annual Premium Equivalent (annualised recurring premiums and 10% of single premiums).

Total new business in the individual division declined by 25,6% for the year to R259,2 million, with the second half of the year showing an improvement of 18,7% over the first half.

In the Employee Benefits division, new business decreased by 20% year-on-year to R70,3 million.

External sales by Sage Unit Trusts for the 12 months totalled R755,4 million, compared with R 1 438,7 million in the previous year, with the second half of the year showing an improvement of 31% over the first half.

Lapses and surrenders

There has been an improvement in the trend of policy discontinuances through lapsing and surrenders during the second half of the year. The number of policies lapsed during the 12 months decreased by 1,3% while the number of policies surrendered increased by 4,4% year on year.

The number of policies surrendered in the second half declined by 11% compared to the first half and were 6% below those of the second half of 2002. The value of in force annualised premiums has declined marginally to R 1 017 million at 31 December 2003 compared to R 1 027 million at 31 December 2002.

Mehlomakulu explains: "We do not disclose this number and prefer to disclose the overall trend."

Investments

Sage Life's money weighted average fund investment returns for 2003 were as follows:

* Individual domestic portfolios 19,8% (3% in 2002)

* Individual foreign portfolios -1,2% (-25,6% in 2002)

* Employee Benefits linked portfolios 19,3% (-3% in 2002)

* In addition shareholder funds benefited directly from the positive performance of the ABSA holding.

Financial Results

The second half of the year saw an improvement in business unit operational performance as a result of the new business, expense management, policy discontinuance and investment trends outlined above.

At Group level, the Equity Linked Notes (ELN's) remain fully hedged against the movement in the rand/dollar exchange rate but their value will be impacted by the embedded derivative to be fair valued in terms of AC133.

"The ELN's are hedged against the movement in the rand/dollar exchange rate meaning that their value will not fluctuate as the currency fluctuates," reports Mehlomakulu.

"We will reflect neither a profit nor a loss as a result of currency fluctuations. However the nominal value of the bond in dollar terms may fluctuate as a result of the option that bond holders have relating to the ABSA share price in dollar terms."

Full details of this option were disclosed in the 2002 annual report.

The company issued a trading update last Wednesday.

The group's financial results are expected to show a substantial improvement in total earnings (+30%) attributable to shareholders and headline earnings for the 12 months ended 31 December 2003, compared to those for the 9 months to 31 December 2002.

The health warning is the fact that the auditors haven't signed off on the numbers yet.

Angelo Coppola spoke to Nombini Mehlomakulu, head of investor relations at Sage Group who started off by saying: "The report was merely a trading update. The full and final picture will become clearer when the annual results will be announced on 17 March 2003.

"The year-end actuarial valuation has not been completed."

FA News: Where did you make money, if new business was down, expenses were

slightly up, and surrenders were up.

"Life companies in the main make money on the existing book and out of investments in the shareholder funds. New business is normally a drain on profits," explains Mehlomakulu.

FA News: Are your reporting any income from the closed USA operation sale?

"No. In our 2002 accounts provisions were made for run-offs in the major expenses and in our 2003 accounts we will be in a position to review the appropriation of these provisions.

"There may be positive or negative adjustments and this will be disclosed in our 2003 accounts," says Mehlomakulu.

New Business down on all counts

Total South African life new business for the 12 months under review showed a decline of 24,5% to R329,5 million compared to the previous year in terms of Annual Premium Equivalent (annualised recurring premiums and 10% of single premiums).

Total new business in the individual division declined by 25,6% for the year to R259,2 million, with the second half of the year showing an improvement of 18,7% over the first half.

In the Employee Benefits division, new business decreased by 20% year-on-year to R70,3 million.

External sales by Sage Unit Trusts for the 12 months totalled R755,4 million, compared with R 1 438,7 million in the previous year, with the second half of the year showing an improvement of 31% over the first half.

Lapses and surrenders

There has been an improvement in the trend of policy discontinuances through lapsing and surrenders during the second half of the year. The number of policies lapsed during the 12 months decreased by 1,3% while the number of policies surrendered increased by 4,4% year on year.

The number of policies surrendered in the second half declined by 11% compared to the first half and were 6% below those of the second half of 2002. The value of in force annualised premiums has declined marginally to R 1 017 million at 31 December 2003 compared to R 1 027 million at 31 December 2002.

Mehlomakulu explains: "We do not disclose this number and prefer to disclose the overall trend."

Investments

Sage Life's money weighted average fund investment returns for 2003 were as follows:

* Individual domestic portfolios 19,8% (3% in 2002)

* Individual foreign portfolios -1,2% (-25,6% in 2002)

* Employee Benefits linked portfolios 19,3% (-3% in 2002)

* In addition shareholder funds benefited directly from the positive performance of the ABSA holding.

Financial Results

The second half of the year saw an improvement in business unit operational performance as a result of the new business, expense management, policy discontinuance and investment trends outlined above.

At Group level, the Equity Linked Notes (ELN's) remain fully hedged against the movement in the rand/dollar exchange rate but their value will be impacted by the embedded derivative to be fair valued in terms of AC133.

"The ELN's are hedged against the movement in the rand/dollar exchange rate meaning that their value will not fluctuate as the currency fluctuates," reports Mehlomakulu.

"We will reflect neither a profit nor a loss as a result of currency fluctuations. However the nominal value of the bond in dollar terms may fluctuate as a result of the option that bond holders have relating to the ABSA share price in dollar terms."

Full details of this option were disclosed in the 2002 annual report.

The company issued a trading update last Wednesday.

The group's financial results are expected to show a substantial improvement in total earnings (+30%) attributable to shareholders and headline earnings for the 12 months ended 31 December 2003, compared to those for the 9 months to 31 December 2002.

The health warning is the fact that the auditors haven't signed off on the numbers yet.

Angelo Coppola spoke to Nombini Mehlomakulu, head of investor relations at Sage Group who started off by saying: "The report was merely a trading update. The full and final picture will become clearer when the annual results will be announced on 17 March 2003.

"The year-end actuarial valuation has not been completed."

FA News: Where did you make money, if new business was down, expenses were

slightly up, and surrenders were up.

"Life companies in the main make money on the existing book and out of investments in the shareholder funds. New business is normally a drain on profits," explains Mehlomakulu.

FA News: Are your reporting any income from the closed USA operation sale?

"No. In our 2002 accounts provisions were made for run-offs in the major expenses and in our 2003 accounts we will be in a position to review the appropriation of these provisions.

"There may be positive or negative adjustments and this will be disclosed in our 2003 accounts," says Mehlomakulu.

New Business down on all counts

Total South African life new business for the 12 months under review showed a decline of 24,5% to R329,5 million compared to the previous year in terms of Annual Premium Equivalent (annualised recurring premiums and 10% of single premiums).

Total new business in the individual division declined by 25,6% for the year to R259,2 million, with the second half of the year showing an improvement of 18,7% over the first half.

In the Employee Benefits division, new business decreased by 20% year-on-year to R70,3 million.

External sales by Sage Unit Trusts for the 12 months totalled R755,4 million, compared with R 1 438,7 million in the previous year, with the second half of the year showing an improvement of 31% over the first half.

Lapses and surrenders

There has been an improvement in the trend of policy discontinuances through lapsing and surrenders during the second half of the year. The number of policies lapsed during the 12 months decreased by 1,3% while the number of policies surrendered increased by 4,4% year on year.

The number of policies surrendered in the second half declined by 11% compared to the first half and were 6% below those of the second half of 2002. The value of in force annualised premiums has declined marginally to R 1 017 million at 31 December 2003 compared to R 1 027 million at 31 December 2002.

Mehlomakulu explains: "We do not disclose this number and prefer to disclose the overall trend."

Investments

Sage Life's money weighted average fund investment returns for 2003 were as follows:

* Individual domestic portfolios 19,8% (3% in 2002)

* Individual foreign portfolios -1,2% (-25,6% in 2002)

* Employee Benefits linked portfolios 19,3% (-3% in 2002)

* In addition shareholder funds benefited directly from the positive performance of the ABSA holding.

Financial Results

The second half of the year saw an improvement in business unit operational performance as a result of the new business, expense management, policy discontinuance and investment trends outlined above.

At Group level, the Equity Linked Notes (ELN's) remain fully hedged against the movement in the rand/dollar exchange rate but their value will be impacted by the embedded derivative to be fair valued in terms of AC133.

"The ELN's are hedged against the movement in the rand/dollar exchange rate meaning that their value will not fluctuate as the currency fluctuates," reports Mehlomakulu.

"We will reflect neither a profit nor a loss as a result of currency fluctuations. However the nominal value of the bond in dollar terms may fluctuate as a result of the option that bond holders have relating to the ABSA share price in dollar terms."

Full details of this option were disclosed in the 2002 annual report.

The company issued a trading update last Wednesday.

The group's financial results are expected to show a substantial improvement in total earnings (+30%) attributable to shareholders and headline earnings for the 12 months ended 31 December 2003, compared to those for the 9 months to 31 December 2002.

The health warning is the fact that the auditors haven't signed off on the numbers yet.

Angelo Coppola spoke to Nombini Mehlomakulu, head of investor relations at Sage Group who started off by saying: "The report was merely a trading update. The full and final picture will become clearer when the annual results will be announced on 17 March 2003.

"The year-end actuarial valuation has not been completed."

FA News: Where did you make money, if new business was down, expenses were

slightly up, and surrenders were up.

"Life companies in the main make money on the existing book and out of investments in the shareholder funds. New business is normally a drain on profits," explains Mehlomakulu.

FA News: Are your reporting any income from the closed USA operation sale?

"No. In our 2002 accounts provisions were made for run-offs in the major expenses and in our 2003 accounts we will be in a position to review the appropriation of these provisions.

"There may be positive or negative adjustments and this will be disclosed in our 2003 accounts," says Mehlomakulu.

New Business down on all counts

Total South African life new business for the 12 months under review showed a decline of 24,5% to R329,5 million compared to the previous year in terms of Annual Premium Equivalent (annualised recurring premiums and 10% of single premiums).

Total new business in the individual division declined by 25,6% for the year to R259,2 million, with the second half of the year showing an improvement of 18,7% over the first half.

In the Employee Benefits division, new business decreased by 20% year-on-year to R70,3 million.

External sales by Sage Unit Trusts for the 12 months totalled R755,4 million, compared with R 1 438,7 million in the previous year, with the second half of the year showing an improvement of 31% over the first half.

Lapses and surrenders

There has been an improvement in the trend of policy discontinuances through lapsing and surrenders during the second half of the year. The number of policies lapsed during the 12 months decreased by 1,3% while the number of policies surrendered increased by 4,4% year on year.

The number of policies surrendered in the second half declined by 11% compared to the first half and were 6% below those of the second half of 2002. The value of in force annualised premiums has declined marginally to R 1 017 million at 31 December 2003 compared to R 1 027 million at 31 December 2002.

Mehlomakulu explains: "We do not disclose this number and prefer to disclose the overall trend."

Investments

Sage Life's money weighted average fund investment returns for 2003 were as follows:

* Individual domestic portfolios 19,8% (3% in 2002)

* Individual foreign portfolios -1,2% (-25,6% in 2002)

* Employee Benefits linked portfolios 19,3% (-3% in 2002)

* In addition shareholder funds benefited directly from the positive performance of the ABSA holding.

Financial Results

The second half of the year saw an improvement in business unit operational performance as a result of the new business, expense management, policy discontinuance and investment trends outlined above.

At Group level, the Equity Linked Notes (ELN's) remain fully hedged against the movement in the rand/dollar exchange rate but their value will be impacted by the embedded derivative to be fair valued in terms of AC133.

"The ELN's are hedged against the movement in the rand/dollar exchange rate meaning that their value will not fluctuate as the currency fluctuates," reports Mehlomakulu.

"We will reflect neither a profit nor a loss as a result of currency fluctuations. However the nominal value of the bond in dollar terms may fluctuate as a result of the option that bond holders have relating to the ABSA share price in dollar terms."

Full details of this option were disclosed in the 2002 annual report.

The company issued a trading update last Wednesday.

The group's financial results are expected to show a substantial improvement in total earnings (+30%) attributable to shareholders and headline earnings for the 12 months ended 31 December 2003, compared to those for the 9 months to 31 December 2002.

The health warning is the fact that the auditors haven't signed off on the numbers yet.

Angelo Coppola spoke to Nombini Mehlomakulu, head of investor relations at Sage Group who started off by saying: "The report was merely a trading update. The full and final picture will become clearer when the annual results will be announced on 17 March 2003.

"The year-end actuarial valuation has not been completed."

FA News: Where did you make money, if new business was down, expenses were

slightly up, and surrenders were up.

"Life companies in the main make money on the existing book and out of investments in the shareholder funds. New business is normally a drain on profits," explains Mehlomakulu.

FA News: Are your reporting any income from the closed USA operation sale?

"No. In our 2002 accounts provisions were made for run-offs in the major expenses and in our 2003 accounts we will be in a position to review the appropriation of these provisions.

"There may be positive or negative adjustments and this will be disclosed in our 2003 accounts," says Mehlomakulu.

New Business down on all counts

Total South African life new business for the 12 months under review showed a decline of 24,5% to R329,5 million compared to the previous year in terms of Annual Premium Equivalent (annualised recurring premiums and 10% of single premiums).

Total new business in the individual division declined by 25,6% for the year to R259,2 million, with the second half of the year showing an improvement of 18,7% over the first half.

In the Employee Benefits division, new business decreased by 20% year-on-year to R70,3 million.

External sales by Sage Unit Trusts for the 12 months totalled R755,4 million, compared with R 1 438,7 million in the previous year, with the second half of the year showing an improvement of 31% over the first half.

Lapses and surrenders

There has been an improvement in the trend of policy discontinuances through lapsing and surrenders during the second half of the year. The number of policies lapsed during the 12 months decreased by 1,3% while the number of policies surrendered increased by 4,4% year on year.

The number of policies surrendered in the second half declined by 11% compared to the first half and were 6% below those of the second half of 2002. The value of in force annualised premiums has declined marginally to R 1 017 million at 31 December 2003 compared to R 1 027 million at 31 December 2002.

Mehlomakulu explains: "We do not disclose this number and prefer to disclose the overall trend."

Investments

Sage Life's money weighted average fund investment returns for 2003 were as follows:

* Individual domestic portfolios 19,8% (3% in 2002)

* Individual foreign portfolios -1,2% (-25,6% in 2002)

* Employee Benefits linked portfolios 19,3% (-3% in 2002)

* In addition shareholder funds benefited directly from the positive performance of the ABSA holding.

Financial Results

The second half of the year saw an improvement in business unit operational performance as a result of the new business, expense management, policy discontinuance and investment trends outlined above.

At Group level, the Equity Linked Notes (ELN's) remain fully hedged against the movement in the rand/dollar exchange rate but their value will be impacted by the embedded derivative to be fair valued in terms of AC133.

"The ELN's are hedged against the movement in the rand/dollar exchange rate meaning that their value will not fluctuate as the currency fluctuates," reports Mehlomakulu.

"We will reflect neither a profit nor a loss as a result of currency fluctuations. However the nominal value of the bond in dollar terms may fluctuate as a result of the option that bond holders have relating to the ABSA share price in dollar terms."

Full details of this option were disclosed in the 2002 annual report.

Quick Polls

QUESTION

The next year or two will continue to be a turbulent one with regards to regulatory change. Do you think…

ANSWER

What we need is less regulation not more
The industry has overwhelmed itself with its own excessive regulation
The industry is bracing itself to deal with the regulatory changes, and brokers and insurers need to stay well informed of the effects of these changes
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FAnews June 2021 Get the latest issue of FAnews

This month's headlines

Broker and insurer collaboration should not be a one-way street
Running on outdated systems… There's risks
Policy wordings with respect to COVID-19
Death or divorce... how best to split assets
Ethical investing… principles and moral codes
Portfolio positioning will serve investors well
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